January 19, 2007

 

US farmers planting more corn this year to meet ethanol demand

 

 

Inspired by soaring demand for corn to feed the growing ethanol industry, farmers across the United States are planting corn this year instead of soybeans, wheat and cotton.

 

Some in the Midwest are ending their longtime practice of rotating plantings of soybeans one year and corn the next, choosing to grow corn in consecutive years. Livestock farmers are turning pastures into cornfields.

 

Prices for corn are up to $3.40 a bushel and are projected to approach $4, reaching highs not seen in the last decade. At least 6 million to 8 million more acres (2.4 million to 3.2 million more hectares) of corn will be needed to supply ethanol plants, analysts say.

 

Ethanol production is expected to double as new plants are built to turn corn into the gasoline additive, from around 5 billion gallons (19 billion liters) now to 11 billion gallons (42 billion litres), according to industry estimates.

 

Private investment in ethanol plants has soared as government leaders have called for more production of renewable fuels.

 

Farmers in the Midwest may be able to make US$50 per acre by going with corn instead soybeans, Roberts said. "That's a tremendous difference," he said.

 

Some farmers are contemplating planting continuous years of corn, but that can lead to pest problems and increased costs for fertiliser and seed, said Bruce Erickson, a Purdue University agricultural economist.

 

And those fields tend to produce less each year. Most farmers rotate their crops to maintain nutrients in the soil and stop insects and weeds.

 

"Most scientific research shows a 10 percent drop in yield when you plant corn on corn," Erickson said.

 

In Louisiana, the number of acres devoted to corn likely will double and could triple, said David Bollich, a grain marketing specialist with the Louisiana Farm Bureau.

 

"Everybody wants to get into corn this year, some who have never planted it before," he said.